Dealer ordered to pay customers for finance fraud

A Brooklyn, N.Y., dealer and four of his dealerships must pay $510,000 in penalties and restitution to customers for fraudulent and illegal financing and sales practices that were “extensive and unsettling,” a judge has ruled.

Those practices included misrepresentation of financing and sales terms, deceptive contest promotions, adding unwanted aftermarket options in financing agreements, and pressuring customers to sign blank contracts, according to a civil suit filed by the New York attorney general’s office.

The award against John Giuffre and his Hyundai, Kia, Mazda and Mitsubishi stores included $294,500 in restitution to 46 customers. The rest of the judgment is for civil penalties and court costs.

Kings County Supreme Court Justice Bernard Graham also issued an injunction prohibiting further violations of the Truth in Lending Act and state insurance and motor vehicle laws.

Graham’s decision cited “a common practice of strong-arm sales methods and unethical conduct.” Many victims were “older persons, unsophisticated or unfamiliar with English, and each person wound up owning a car that they never intended to buy of a price that was dishonestly represented to them.”

Attorney General Eric Schneiderman said: “Some of these transactions led to repossessions and ruined credit, as the consumers found themselves owing more than they ever would have knowingly agreed to pay.”

The decision also requires Giuffre to notify lenders, creditors and credit reporting agencies to remove “negative information” about those customers injured by the stores’ fraudulent conduct.